General Motors (GM) owes its current profits boost to its pickup trucks and SUVs. In the final quarter of last year, GM’s operating profits slipped 8% from a year earlier, due to declines in China and South America.
But the company still beat Wall Street analysts’ profit forecasts thanks to the higher prices garnered for their redesigned models of pickup trucks in the U.S. This fact speaks to the need for money to be designated for regular efforts in vehicle redesign, as well as for efforts related to retooling North American manufacturing. GM’s North American business posted a record fourth-quarter operating profit of $3.04 billion even in the face of lower overall U.S. sales. The average selling price of popular truck brands like Chevrolet Silverado and GMC Sierra rose to $44,000 last year. Which again shows why it’s “all about trucks,” rather than total vehicles sold. CEO Mary Barra has, in recent years, re-focused the company’s efforts in the U.S. and China, after leaving Europe and other money-losing areas. And, let’s hope she remembers what country it is that actually “pulled it off” for the company in the recent fourth quarter earnings, and what vehicles it was that turned the trick. Perhaps the fact that, in fourth quarter, GM’s international division accounted for most of the 8% decline in profits with a $48 million loss instead of the $416 million operating profit a year earlier will assist her in being reminded of what country actually she is beholden to for her profit increases. Barra has recently been known to report that she was closing plants and laying off workers in the U.S., in favor of attempting to generate business internationally. The recent earnings report should enlighten Barra about U.S. manufacturing needs, particularly as they relate to pickup trucks and SUVs – not only are these vehicles far safer on the roadways, they also are far easier to drive in high-traffic areas providing better visibility and maneuverability. GM disclosed last week that it will issue profit-sharing of up to $10,750 per worker to about 46,500 factory workers, payouts related to 2018 operating profits in North America. Success with ALL THE MOVING PARTS of a company require that employees are treated with due respect – and an excellent way to show respect is in profit sharing. The plants where the checks were headed were not specified, but one can hope that the United Auto Workers who are working in truck and SUV manufacturing plants in the U.S. will figure heavily among the 46,500 workers being paid bonuses. The WSJ posted a recent article entitled, “Truck Sales in U.S. Keep GM Rolling.” Yes, indeed.